HARARE – Sixty-six percent (66 percent) of firms in the country will pay bonuses in 2018, which is an increase from 50 percent who paid bonuses last year, a new study by Industrial Psychology Consultants (IPC).
The study revealed that these bonuses are going to be paid based on both individual and company performance, while companies that are not paying bonuses this year attribute that to economic challenges, which affect their ability to afford the bonuses.
Other key outcomes of the IPC study show that 26 percent of the surveyed organisations will not pay bonuses, while 8 percent of the participating organisations are uncertain as to whether or not they will pay a bonus.
45 percent of the firms factored in both company and individual employee performance when calculating the bonus for each employee, while a significant 27 percent of the participants said there is no link to performance when calculating bonuses.
Also notable was that 14 percent of the participants factor in company performance, while another 14 percent consider “other factors.”
Said IPC managing consultant Mr Memory Nguwi:
“The worrying trend though is that is a sizeable number of participating organisations are paying the bonus not because they performed but they are fulfilling a contractual obligations. The contractual obligation comes from the bonus being part of a Collective Bargaining Agreement (CBA) or being part of an individual employee contract.
“Given the dire economic situation that most companies find themselves in it may be time for these companies to renegotiate the CBA or the individual contracts so that these take into consideration company performance and individual employee contribution.”
The study also revealed that most of the participating organisations are planning to increase employee salaries by 10 percent for both executive, managerial and NEC employees next year.
68 percent of the participating organisations believe that their companies are performing well but can do better, while 15 percent believe that their companies are struggling to remain viable and 17 percent believe they are performing extremely well.
“There is a positive relationship between willingness to paying a bonus and whether the bonus is performance related. However, most of the participants (67 percent) who are forecasting to pay bonuses this year said that bonus will be a guaranteed cheque,” said Nguwi.
“This suggests that, overall, bonuses this year will be paid not because the company has performed, rather because the bonus is contractual (guaranteed).
“There is a significant relationship between whether the bonus is performance related and what is considered when calculating the bonus. Most of the participants who factor in both company and individual performance said their bonus is performance related.
“Those participants that do not link bonus to performance said they provide guaranteed cheques.”